PIP COURTNEY, PRESENTER: The collapse of the Soviet Republic in 1991 was one of the defining events of the 20th Century.

But while many in the Western world were celebrating, Australian woolgrowers faced a disaster. The end of international communism also meant the loss of Australia's biggest wool buyer.

But now, after a 20-year hibernation, the Russians may be coming back, as Tim Lee reports.

TIM LEE, REPORTER: It may time inauspicious: a short minibus tour around a showcase property that produces fine merino wool at Lal Lal, west of Melbourne. But this bus is carrying a precious cargo. On board is a delegation from Russia's wool industry that carries great hopes for the nation's woolgrowers.

Russia is often depicted as a giant bear, and for Australian woolgrowers, that bear is only now emerging from a two-decade-long hibernation.

JIMMY JACKSON, AUSTRALIAN WOOL INNOVATION: It's absolutely wonderful from our perspective. As you know, in the - before the collapse of the Soviet Union in 1991, used to be our biggest buyer. Didn't do anything for two decades. Russia started to stabilise a few years ago with becoming wealthy due to oil and gas and we thought it was time perhaps to explore again.

TIM LEE: So could this trade mission on a grassroots expedition represent the first new green shoots, so to speak, that mark the end of a very long winter.

KONSTANTIN KONEVEGO, RUSSIAN TEXTILE MANUFACTURER (voiceover translation): The purpose of my visit is to find the best suppliers of the best wool, which I am looking for.

TIM LEE: The collapse of the Soviet Union in 1991 was extraordinarily momentous for world politics, but it set Australian woolgrowers on the road to calamity. The Soviets have been major buyers of medium merino wool, wool they used to make military overcoats, blankets and uniforms to fend off the freezing Russian winter.

The end of communist rule saw Soviet government wool buyers disappear overnight from Australian auction rooms. With growers guaranteed a minimum reserve price for their wool, the pass-in rate quickly escalated. By 1993, with a wool stockpile approaching an alarming five million bales, the wool market crashed spectacularly, from which it took the industry years to recover. While in the new Russia, new-found freedoms and capitalism did not translate into a resumption of the former wool trade.

(Wool Corporation archives, 1992): The wool textile industry of the Soviet Union is the largest in the world. But they produce standard goods, goods that are not particularly attractive.

TIM LEE: Konstantin Konevego, the head of Pavlovo-Posadsky, Russia's most famous brand of uniform, is keen to finally change that, using fine wool.

That quest got bogged down, quite literally, but only briefly, in a wet gully. Then the show rolled on.

GEOFF FISKEN, WOOL PRODUCERS' AUSTRALIA: These are five-year-old merino ewes with 100 per cent lambs at foot, so 100 per cent means for every 100 ewes, there's 100 lambs. The sheep are run outside 12 months of the year in Australia. We don't shed our sheep.

TIM LEE: These merinos grow fleeces of about 18 microns, the type of wool used for softer, finer, more fashionable and stylish clothing. Growing demand for finer wool is being driven by rising affluence in Russia.

KONSTANTIN KONEVEGO, RUSSIAN TEXTILE MANUFACTURER (voiceover translation): This Russian market is developing and the customers, first of all, they have now more money and they are looking for better quality, for better products, better clothing and that's why, well, we have to find also better materials for that, better wool.

JIMMY JACKSON: As people become richer, you know, anybody, whether it's Russian people, Australian, UK people like me, they want better cars, they want better food and wear better clothes. So, the affluence is growing tremendously in Russia, as I say, because of the oil and gas, You go in Moscow, you go in St Petersburg and I think there's another nine big cities, there's opportunities. So, as I say, more money, better clothes. Gives us great potential for Australian merino.

TIM LEE: Wool trader Evan Croake recently visited Russia to explore trade opportunities, part of a tour by Australian Wool Innovation, or AWI.

EVAN CROAKE, LEMPRIERE WOOL: When we made the mission there last year with AWI, we were very open-minded. It was just to sort of see what other markets were out there and where these Russian clients are currently buying their wool. So, our focus is trying to develop markets outside of China, which, along with AWI, is one of the most main focuses that we have.

TIM LEE: China's increasingly large market share - it now buys almost 80 per cent of the Australian wool clip - has meant an unhealthy reliance on just one buyer.

JIMMY JACKSON: Two things when it comes to China. First of all, as you know, 75 per cent or 80 per cent of our wool goes to China, and running any business, if you've got one big customer, it's always a concern, a definite risk. And particularly with China, the Government can change the rules during the night. And secondly, there's only a few buyers in the auction room today, and like with any auction, the more buyers you get in an auction room, the greater chance you're going to get a better price.

TIM LEE: So where have the Russians been getting their wool from for the past two decades?

JIMMY JACKSON: It's been derived from primarily from the south of Russia. It's still a wool-growing area. It's going down, it's reduced a lot. We're personally happy about that, but they've been using that. So there was 10 or 20 years where nobody had no money, but they had to keep warm because of the weather there. You know, it's minus 30, minus 35 in the wintertime, so you need wool to keep warm.

EVAN CROAKE: Most of the clients that we met there, they're generally using Russian domestic wool or European domestic wool. More in the sort of 23 to 28 micron range and a lot lower quality, lower style than Australian wool.

TIM LEE: In the old Soviet days, Russia bought coarse wool, known as medium micron, which was cheap and affordable. But much has changed since those days. Not much of that wool is grown anymore in Australia, and besides, today's Russians want a superior type of wool like this, which goes to the higher end of fashion.

Australia is one of the few places such wool is grown. To better understand its production, the Russian visitors looked at key aspects of wool producing at several properties, including Geoff Fisken's. He's president of Wool Producers Australia.

KONSTANTIN KONEVEGO (voiceover translation): Yes, in the last few days we have visited different farms and we have visited also the auction. And I can say that Australian wool is the best. The quality of the Australian wool is best what I have seen.

AUSTRALIAN WOOLGROWER: There's people now in Australia that are going to nearly six-month shearings. So they're growing a longer stapled sheep and they're - probably they're on high-nutrient pastures or something like that where they can put enough feed into the sheep where they can grow faster.

RUSSIAN WOOL BUYER: Three times in two years?

AUSTRALIAN WOOLGROWER: Easy, and a lot of places are doing that now.

TIM LEE: News of the Russian visitors has been welcomed by Australian woolgrowers.

MALCOLM NICHOLLS, ELDERS WOOL: We have had woolgrowers ring in and ask: has there been any action with the Russian buying? As yet we haven't seen any of that. It seems like the Russians have got the capacity to move into it, but apart from the delegation that we saw here on the floor, that's all that's happened. It'd be terrific to see them come back into the market. To think that there was some more processing capacity in the world, it'd be great.

TIM LEE: There are several impediments, such as the Australian dollar; not so much that it's high, but that its fluctuations are presently making it hard for exporters.

JIMMY JACKSON: We can't do anything personally about the Australian dollar. But one thing what we can do, first of all, work with the manufacturers there, to give them ideas, to transfer technology, to develop better products, a more expensive range. And the second stage, once we've done that, we help them do the marketing then. We help them put the story together. And we help them also find better customers, better retailers and brands who sell at higher price point.

TIM LEE: AWI says it's getting increasing trade inquiries from the Russian and neighbouring Belarusian textile industries. And the Federal Government, through the Australian Quarantine Inspection Service, is currently devising new trade agreements to allow raw Australian wool to be imported directly to Russia. At present, it usually has to be shipped first to Germany. So far, only 1,000 kilos of Australian wool has left our shores for Russia. The national clip is annually about 345,000 tonnes. The effect of drought throughout much of Australia's inland wool-producing regions is certain to pull that figure back. Lower stocks might also engender stronger competition among woolbuyers.

MALCOLM NICHOLLS: Well we could only imagine that it's going to definitely see the figures drop. The - a lot of that country at the top end of NSW and into Queensland is in severe drought. We're hearing reports of a lot of sheep moving out of those areas and the wool cut are the ones that are left there'll definitely be down. So, we're sure that we'll just see the clip drop a little bit further again.

JIMMY JACKSON: It's just been wonderful having the Russians here. You know, it's cemented relationships. We've had a lot of fun. We've lost one or two along the way and found them again, fortunately, but we've had a lot of fun. So, that's what it's about and they've really enjoyed it, I know. And they're going to go back with fantastic memories of Australia and fantastic memories about the Australian wool-growing industry and they will tell their friends, they will tell other companies, etc. So, it's great.

KONSTANTIN KONEVEGO (voiceover translation): With the time the Russian customers and the Russian companies will be (inaudible) returning and looking for better wool, for better quality and that's what the market will need. I have seen so many different companies and farms and I saw how people work and I saw the high standards of working here and I think it's the best sample - example for us, and if you will continue like this, so you will remain the main wool-producing country in the world.